FIRST Quantum Minerals (FQM) Limited has expressed that the inadequate smelting capacity within Zambia has led to a stockpile of 200, 00 metric tonnes of copper concentrate at its Kansanshi mine in Solwezi.
FQM, estimates the stockpile to contain copper worth US$370 million at current market price.
This was expressed to the press last week through John Gladston, who is responsible for government affairs at FQM.
Gladston was quoted by media saying, “Clearly, there is also tax revenue locked up in that stockpile.”
And First Quantum’s Chief Executive and Chairman Philip Pascall recently said that an ongoing lack of smelting availability in Zambia has continued to hamper First Quantum’s Kansanshi Mine copper production.
“These constraints will ease substantially when our new smelter is in operation beginning in 2015,” he said.
In addition, Gladstone revealed FQM plans to start processing the concentrates through its own smelter which it is constructing at Kansanshi mine.
The commissioning of the smelter is set to start at the end of 2014 and continue into next year.
This smelter will have a capacity of 1.2 million tonnes of copper concentrates per annum.
Meanwhile, FQM has not set a date for the commissioning of the Kalumbila Minerals Limited (KML), expected to be the biggest open-pit mine in Africa.
“No date has been set for the commissioning of the mine. However, we will communicate the date to all stakeholders when announced by KML management,” Mr Gladstone said.
And commenting on the mining regime change, FQM says the greatest uncertainty for open-pit mining in Zambia remains the possible introduction of a 20 percent mineral royalty tax proposed in the 2015 budget.
“This proposal will make open-pit mining significantly less economic for operators and will make Zambia a less attractive jurisdiction future investment,” Mr Gladstone said.
Further the Canadian base metal miner has been hurt by lower copper output, reporting a bigger-than-expected drop in third-quarter earnings due in part to lower copper and nickel production.
The company, which primarily mines copper but also produces nickel and gold, said earnings fell to $121.2 million, or 21 cents a share, in the three months through September, from $143 million, or 24 cents, a year earlier.
Analysts, on average, expected First Quantum to report earnings of 26 cents a share, according to Thomson Reuters.
The company, which took over rival Inmet Mining last year, gaining control of the huge Cobre Panama project in Panama, is poised to become one of the world’s largest copper producers over the next five years with a number of projects including Cobre Panama in Central America, set to begin production.
The Vancouver-based miner produced 101,553 tonnes of copper in the quarter, down 11 percent from the same period a year ago. Nickel output fell 5 percent and gold production fell by 21 percent.
Cash costs per pound of copper rose to $1.44 from $1.16 a year ago, while the average copper price the company received rose 1 cent to $3.11 a pound.